CA IPCC NOV 2011 QUSTION PAPER 3

7/31/2019 CA IPCC NOV 2011 QUSTION PAPER 3

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Roll No..............................PCE

GROUP-II PAPER-IV

COST ACCOUNTING &

FINANCIAL MANAGEMENT

NOV2011

Total No. of Questions- 7 Total No. of Printed Pages -16

Time Allowed - 3 Hours Maximum Marks - 100

tPCC

GROUP.'PAPER"

ff'Q t"rr""~'NG

YMK-H AND III\AM.IML MAI\IA~EMENT

Answers to questions are to be given only in English except in the case of candidates who

have opted for Hindi Medium. If a candidate has not opted for Hindi medium, his answers in

Hindi will not be valued.

1.

Question No.1 is compulsory.

Attempt any five questions from the remaining six questions.

Working notes should form part of answer.

Marks

Answer the following: 4x5

(a) The PN Ratio of Delta Ltd. is 50% and margin of safety is 40%. The company =20

sold 500 units for f 5,00,000. You are required to calculate:(i) Break even point, and

(ii) Sales in units to earn a profit of 10% on sales

(b) X executes a piece of work in 120 hours as against 150 hours allowed to him.

His hourly rate is f 10 and he gets a dearness allowance @ f 30 per day of 8

hours worked in addition to his wages. You are required to. .calculate tof1\l

wages received by X under the following incentive schemes: .

'(i) Rowan Premium Plan, and

(ii) Emerson's Efficiency Plan

(c) A new customer with 10% risk of non-payment desires to establish business

connections with you. He would require 1.5 month of credit and is likely to

increase your sales by f 1,20,000 p.a. Cost of sales amounted to 85% of sales.

The tax rate is 30%.

Should you accept the offer if the required rate of return is 40% (after tax) ?YMK~H P.T.O.

\. -


2/16

2.

(2)

YMK-H Marks

(d) Beeta Ltd. has furnished the following infonnation :

Earning per share (EPS) ~4

Dividend payout ratio 25%

Market price per share ~ 40

Rate of Tax 30%

.Growth rate of dividend 8%

The company wants to raise additional capital of ~ 10 lakhs including debt of

~ 4 lakhs. The cost of debt (before tax) is 10% upto ~ 2 lakhs and 15% beyond

that.

Compute the after tax cost of equity and debt and the weighted average cost of

capital.

(a) X Ltd. recovers overheads at a.pre-detennined rate of ~ 50 per man-day. The

total factory overheads incurred and the man-days actually worked were,

8

~ 79 lakhs and 1.5 lakhs days respectively. During the period 30,000 units

were sold. At the end of the period 5,000 completed units were held in stock

but there was no opening stock of finished goods. Similarly,'there was no stock

of uncompleted units at the beginning of the period but at the end of the

period there were 10,000 uncompleted units which may be treated as 50%,

complete.

On analyzing the reasons, it was found that 60% of the unabsorbed overheads

were due to defective planning and the balance were attributable to increase in

overhead cost.

How would unabsorbed overheads be treated in cost accounts?

YMK-H\,'.


3/16

(3)

YMK-H Marks

(b) The financial statements of a company contain the following information for

the yearending31st March,2011 :

8

Particulars ~

1,60,000Cash

Sundry Debtors

Short-term Investment

4,00,000

3,20,000

Stock 21,60,000

10,000Prepaid Expenses

Total Current Assets

Current Liabilities

30,50,000

10,00,000

10% Debentures 16,00,000

20,00,000

8,00,000

Equit)' Share Capital

Retained Earnings

Statement of Profit for the year ended 31stMarch, 2011

Sales (20% cash sales) 40,00,000

28,00,000Less: Cost of goods sold

Profit before Interest & Tax 12,00,000

1,60,000Less: Interest

Profit Before Tax 10,40,000

3,12,000Less: Tax @ 30%

Profit After Tax 7,28,000

You are required to calculate:

(i) Quick Ratio

(ii) Debt-equity Ratio

(iii) Return on Capital Employed, and

(iv) Average collection period (Assuming 360 days in a year).

YMK-H P.T.O.


4/16

3.

(4)

YMK-H Marks

(a) The following details are available of Process X for August 2011 : 8

.,8,000 units

~

~

~

63,900

10,800

5,400

~ 7,56, 900

~ 3,28,000

~ 1,64,000

14,000

100%

80%

'-

18000 units

100%

Labour and overhead 70%

(7)

(8)

1,58,000 units were completed and transferred to next process.

Normal loss is 8% of total input including opening work-in-process.

(9) Scrap value is ~ 8 per unit to be adjusted in direct material cost.

You are required to compute, assuming that average method of inventory is

used:

(i) Equivalent production, and

(ii) Cost per unit

\ . YMK-H

(1) Opening work-in-process

Degree of completion and cost:

Material (100%)

Labour (60%)

Overheads (60%)

(2) Input 1,82,000 units at

(3) Labour paid

(4) Overheads incurred

(5) Units scrapped

Degree of completion:

Material

Labour and overhead

(6) Closing work-in-process

Degree of completion:

Material


5/16

4.

(5)

YMK-H Marks

(b) Alpha Ltd. has furnished the following Balance Sheet as on March 31, 2011 : 8

Additional informations:

. (1) Annu~l Fixed Cost other than Interest

(2) Variable Cost Ratio

(3) Total Assets Turnover Ratio

(4) Tax Rate

You are required to calculate:

(i) Earning Per Share (EPS), and

(ii) Combined Leverage.

28,00,000

60%

2.5

30%

(a) The Trading and Profit and Loss Account of Beta Ltd. for the year ended

3151March, 2011 is given below:

8

YMK-H P.T.D.

Liabilities f Assets f

Equity Share Capital (1,00,006 10,00,000 Fixed Assets 30,00,000

Equity shares off 10 each)

Current Assets 18,00,000

General Reserve 2,00,000

15% Debentures 28,00,000

Current Liabilities 8,00,000

48,00,000 48,00,000

ParticularsAmount Particulars Amount

f f f

To Opening Stock: By Sales (Credit) 20,00,000

Raw materials 1,80,000 By Closing Stock ':

Work-in-progress 60,000 Raw materials' 2,00,000

Finished Goods 2.60.000 5,00,000 Work-in-Progress 1,00000

To purchases (credit) 11,00,000 Finished Goods 3.00.000 6,00,000

To Wages 3,00,000

To Production Expenses 2,00,000

To Gross Profit Cld 5,00,000

26,00,000 26,00,000

To Administration Expenses 1,75,000 By Gross Profit bid 5,00,000

To Selling Expenses 75,000

To Net Profit . 2,50,000

5,00,000 5,00,000


6/16

.$

(6)

YMK-H Marks

The opening and closing balances of debtors were ~ 1,50,000 and ~ 2,00,000

respectively whereas opening and closing creditors were ~ 2,00,000 and

~ 2,40,000 respectively.

You are required to ascertain the working capital requirement by operating

cycle method.

(b) The following information have been extracted from the cost records of a

manufacturing company:

8

* Opening balance

~

9,000

Stores

* Transfer from WIP

48,000

24,000

* Purchases

* Issue to work-in-process 48,000

6,000* Issue for repairs

* Deficiency found in stock 1,800

Work-in-Progress:

* Opening balance

* Direct wages applied

* Overhead charged

18,000\

18',000

* Closing balance

Finished Production:

72,000,

12,000

*Entire production is sold at a profit of 10% on cost from

work-in-process.

* Wages paid. 21,000

75,000* Overheads incurred.

Draw the Stores Ledger Control Alc, Work-in-Progress Control Alc,

Overheads Control Alc and Costing Profit and Loss Alc.

\. . YMK-H


7/16

5.

6.

(7)

YMK-H

Distinguish between:

(i)

(ii)

Cost control and cost reduction.

Fixed and flexible budget.

(iii) Operating lease and financial lease, and

(iv) Net present value method and internal rate of return method.

(a) A Ltd. is considering the purchase of a machine which will perform some

operations which are at present performed by workers. Machines X and Yare

alternative models. The following details are available:

Cost of machine

Estimated life of machine

Estimated cost of maintenance p.a.

Estimated cost of indirect material p.a.

Estimated savings in scrap p.a.

Estimated cost of supervision p.a.

Estimated savings in wages p.a.

Depreciation will be charged on straight line basis. The tax rate is 30%.Evaluate the alternatives according to :

(i) Average r~te of return method, and

(ii) Present value index method assuming cost of capital being 10%.

(The present value off 1.00 @ 10% p.a. for 5 years is 3.79 and for 6 years is

4.354)

YMK-H

Marks

4x4

=16

8

P.T.D.

Machine X Machine Y

f f

. 1,50,000 2;40,000

5 years 6 years

7,000 11,000

6,000 8,000

10,000 , 15,000

12,000 16,000

90,000 1,20,000


8/16

7.

(8)

YMK-H Marks

(b) Gama Ltd. has furnished the following standard cost data per unit of

production:

8

*Material 10 kg @ f 10 per kg.

Labour 6 hours @ f 5.50 per hour.**

Variable overhead 6 hours @ f 10 per hour-.

Fixed overhead f 4,50,000 per month (Based on a normal volume of*

30,000 labour hours).

The actual cost data for the month of August 2011 are as follows:

*Material used 50,000 kg at a cost off 5,25,000.

Labour paid f 1,55,000 for 31,000 hours worked.

Variable overheads f 2,93,000.

Fixed overheads f 4,70,000.

**

*

Actual production 4,800 units.

Calculate:

*

(i) Material cost variance.

(ii) Labour cost variance.

(iii) Fixed overhead cost variance.

(iv) Variable overhead cost variance.

Answer any four of the following: 4x4

=16(a)

(b)

(c)

Elucidate the responsibilities of Chief Financial Officer.

Explain the relevance of time value of money.

Discuss ABC analysis as a system of inventory control

Explain the terms notional profit and retention money in contract costing.(d)

(e) Explain the following:

(i) Bridge finance

(ii) Essentials of budget-

\ - YMK-H


9/16

(9)

YMK-H Marks

(Hindi Version)

&f ~ ~ t9)~en~~ ~ ~ TFTt ~ cf;-'~ ~ 3TIMr~ m~ ~ I

cw~fmR~~~TFT~, ~~~~t=rrt

m~~~Wt~~CfiT ~~ien-1~Wrr I

~~ 1 ~~ I

~W:~~-B~-QT:q~cf;-~~ I

.~ fc.U.jful~1(Working Notes) ~ cf;-'1WT~ ~ I

1. f-1~f~f{Sl(1cf;-~~: 4x5

(31) ~ f~fi.it:SCfiT~-l1f;IT 3fTWf50% ~~~~ 40% ~ 1,Cfi1IFIT~500 ~ =20, ,

~5,00,000~~t I~~~~:

(i) ~-~~, ~

(ii) ~ 1R 10% ~ 31%m~ kJ ~ Cfit\ifR cm;IT~ I

(~) X~~~ 150~~cf;-~1R120~~"'lU~B-m~ 1~>!fucmJ

GT~ 10~ ~ ~ ~ cf;- 3Wf1OIT ~ 30 >!fu ~ (8~ CfiT ~.'~ qftGT-B Wnt'qffi ~ f4mIT ~ I

3WfCfiTf-1~ f(1f{SI(1 ~~uII,~en ~ * cf;-~ X mr ~ Cfit~. cm;IT'f ~ Cfitrrfu~~~:

(i) ~ ~If~~~~, ~

(ii) ~ ~ '1'~I~(11~ I

(~) ~ ~ ~ ~ ~ 'lfffiR ~ ~ em~ 10%~, ~ ~IYIRen~

~ ~ ~ ~ I cw 1.5 ~Cfit '3'tW1TI'rrm~~ ~ ~ ~ ~

~ 1,20,000 ~ Cfit~ ~ I ~ Cfit~ ~ CfiT 85% ~ I ~Cfit GT 30% ~ I

~~cf;-~ ~~GT40%mm~ 3Tfl1W~q;f~"'

~?

YMK-H P.T.O.

\,'. .';di

'" .


10/16

(10)

YMK-H

(~ ~ f(1f~~~~ f~~f(1f~~~ ~ cttf :

Marks

m~~ ~4

~ '1fRfR~ 25%

m~~~ ~ 40

CRin1G:r 30%

~~G:r . 8%

CfiPFfT ~ 10 ~ (~ 4 ~ ct-.~ ~ ttf~f(1~ ~ ~ 31f{1Rct\1TfIT~ ~ t I

CR~~cttffiTffi ~ 2~"ffCO 10%~~GfIG 15%t I

WRIT~ ~ ctt CR~ ~ ~ TfITctt 'l1Tfuf 3llm:rffiTffimo ~ I ,

2. (~ X f(1f~~~-sfdyRO!.I


11/16

(11)

YMK-H Marks

(Gf) ~ CfiURTt- ~ IC4C4(Un-q31~, 2011q;T~ wt qif -B~ 1:1~IMI(SIct 8

~t:

~ ~

m

~~

1,60,000

4,00,000

~~ctJIMl'1 IC4I:1(j14I 3,20,000

21,60,000~

.~~ .

~ ~ tI~I11(ji

10,000

30,50,000

~~

10%~,

10,00,000

16,00,000

~~

~3Wf

20,00,000

8,00,000

31 ~, 2011 cnT~~ri~ 'M+qr~("\ Fmfcnr ~Ct'(UI:

~ (20%-~ ~

~ : ~ ctrBJTRf

~ ~ ~ t- ~ Cf)Tffi'q~:~

~ t- ~ Cf)Tffi'q

40,00,000

28,00,000

12,00,000

1,60,000

10,40,000 '

3,12~000~:~@30%~ t- ~ ffi'q

"' 7,28,000

~mo~t :

(i) ~ ~

(ii) ?ftUT-~ ~

(iii) IC4I:1(jll\11cttm 1R~, ~(iv) 311mn:m~ ~ 0Wl1ffifwt fcpqif -q360 ~ ~ t I)

, 'YMK-H P.T.O.

\ .


12/16

(12)

YMK-H

(31) wmf 2011 11ffl"~~ r-1~f~f(go F.rcRur~ x ~ ~ t :

Marks

3. 8

(1) ~~m

~ ctt 1fBIT~ ffiTWfmmft (100%)

8,000 ~

WI (60%)

dyR~q (60%)

~

~

63,900

10,800

~ 5,400

(2) Rcffi"(input) J ,82,000 ~ ~ 7,56, 900

(3) ~ ~ ~ 3,28,000

(4) dyR~q ~ ~ 1,64,000

(5) ~w:IT~ 14,000

~ ~ ctt 1fBITmmftWI~ dyR~q

~

100%

80%

(6) ~~m~

~ ~ ctt 1fBIT:

18000 ~

mmft 100%

WI ~ dyR~q 70%

(7) :wwIT~ -q ~1I~Ro ~. TTfw:IT~ 1,58,000

(8) ~mR~f~~~lo~cpf8%~~m~~ I

(9) ~~~8~~~~mmftffiTWf-q~Wil~f~o~~ I

~ m CfiBTt, ~ m;ffi~ ~ mm ctt~ m WFRf ctt~ t :

(i) ~ ~

(ii) ~ ~ ffiTWfI

YMK-H

\ .


13/16

(13)

YMK-H. .

(Gf) ~ f(1f~~.s CtiT31 liRf, 2011 CtiTrnw w ~ t :

Marks

8

~

10,00,000"WffiT ~ TpIT (1,00,000 "WffiT

~~10~

~~

15%~-q;r

~~

~ o/:-II-I.jf~~i

~

30,00,000

18,00,000

2,00,000

28,00,000

8,00,000

48,00,000 48,00,000

~r~~~ ~~'11~ :

. (1) ~~~~t-3ifdRctd)

(2) ~RqJ",,~n(1~ 3FfTRf

(3) ~ w:qfu 3TJCRt3FfTRf

(4) CRCfft~

~~CfiBTt :

(i) Wr~~, ~

(ii) ~ d\1l(1ctJ I

~ 28,00,000

60%

2.5

30%

4. (31) 31 liRf, 2011 CfiTWW{f ~ ~ ~ ~ W f(1f~~.sCtiTCX!1~IRctJ~ ~-m"@ffiTf""~11o/:-1IO{t:

8

I

f

I

J

i

I

YMK-H P.T.O.

\ "

: ! 20,00,000

l1'R'f 1,80,000 :

- 60,000 l1'R'f 2,00,000

l1'R'f 2.60.000 5,00,000 1,00,000

11,00,000 l1'R'f . 3.00.000 6,00,000

3,00,000

oq


14/16

(14)

YMK-H Marks

~ cpr ~~ ~ ~ ~~: f 1,50,000 ~ f 2,00,000 2IT~

~~~~~: f2,00,000~f2,40,000*"~ I

~ yR-.:JI


15/16

f

(15)

YMK-H Marks

4x4

=165. f-i~fMf{gdif 3R1{ ~ :

(i) ffiTTOR


16/16

(16)

YMK-H

if) TTfiTIf(1f~~-s ~>rfu~ WIN ~ f-1~I'j~I(WWf ~ t :

* -mmft10 ~m. f 10 >rfu~m.

* W16~f 5.50>rfu~

Marks

8

* ~Rqd-1~n~d~RO'.I~6 ~f 10>rfu~

~ d~RO'.I~ f 4,50,000 >rfu ~ (30,000 ~ ~ ~ 0/ ~)*

:wm=r2011~ ~ ql1fqc:pffiTRf~ f-1~f(1f(Sldt :

* -mmft~ 50,000 ~m. f 5,25,000 ctr ffiTRf

* ~ cor'IfTORf 1,55,000 ql1f~c:pCfiI

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CA IPCC NOV 2011 QUSTION PAPER 3